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Personal - Homeowners Policy

What is a Homeowners Policy?

A homeowners policy is a type of insurance that provides financial protection for your home and personal belongings in the event of damage, theft, or certain types of liability. It is designed to offer peace of mind by helping you recover from unexpected losses that could otherwise result in significant financial hardship.

Typically, a standard homeowners policy includes the following key coverages:

 

1. Dwelling Coverage – Protects the physical structure of your home against covered perils such as fire, windstorms, or vandalism.

This coverage typically includes:

  • The main structure of your home (walls, roof, floors)
  • Attached structures (garages, decks, porches)
  • Built-in appliances and fixtures (plumbing, electrical systems, cabinetry)


Dwelling Coverage is designed to help pay for the repair or reconstruction of your home if it is damaged or destroyed by a covered event. The amount of coverage should reflect the cost to rebuild your home—not its current market value—using similar materials and construction standards.
It is important to regularly review your dwelling coverage limit with a licensed insurance professional to ensure it remains adequate, especially if you have made significant home improvements or if construction costs in your area have increased.

 

2. Other Structures Coverage – Covers structures on your property that are not attached to  your home, such as a detached garage, shed, or fence.

Examples of covered structures may include:

  • Detached garages
  • Sheds or storage buildings
  • Fences and gates
  • Gazebos and pergolas
  • Driveways and walkways

Other Structures Coverage is typically calculated as a percentage of your dwelling coverage—commonly 10%. For example, if your dwelling coverage is $300,000, your other structures coverage may be $30,000. However, this limit can often be adjusted based on your specific needs.

 

3. Personal Property Coverage – Personal Property Coverage is a key component of a          homeowners insurance policy. It provides financial protection for the personal belongings inside your home if they are damaged, destroyed, or stolen due to a covered peril.

Covered items typically include:

  • Furniture
  • Clothing
  • Electronics
  • Appliances
  • Jewelry (up to specified limits)
  • Home décor and other personal items

This coverage generally applies not only within your home but also extends to belongings outside the home—for example, items stolen from your car or lost while traveling—subject to policy terms and limits.  Personal Property Coverage is usually calculated as a percentage of your dwelling coverage (often 50% to 70%). For instance, if your dwelling coverage is $300,000, your personal property coverage might range from $150,000 to $210,000. High-value items such as fine art, jewelry, or collectibles may have sub-limits under a standard policy. In such cases, additional coverage—known as a scheduled personal property endorsement—can be purchased for broader protection.

 

4. Liability Protection - Liability Protection is an essential part of a homeowners insurance policy. It provides coverage in the event that you or a member of your household are found legally responsible for causing bodily injury to someone else or damage to their property.

This coverage typically includes:

  • Legal defense costs, even if the lawsuit is groundless
  • Medical expenses for the injured party
  • Settlements or judgments, up to your policy limits

Examples of incidents that may be covered include:

  • A visitor slipping and falling on your property
  • Your child accidentally breaking a neighbor’s window
  • Your dog biting someone

Liability Protection generally follows you beyond your home. This means you may be covered for incidents that occur elsewhere, such as at a park or while traveling, depending on the circumstances and policy terms. Most standard homeowners policies provide a minimum of $100,000 in liability coverage, but higher limits are strongly recommended. In addition, many homeowners choose to purchase an umbrella policy for broader protection beyond the limits of their primary coverage.


 

5. Additional Living Expenses – Additional Living Expenses (ALE), also known as Loss of Use coverage, is a standard feature in most homeowners insurance policies. It provides financial support for temporary living costs if your home becomes uninhabitable due to a covered loss, such as a fire, storm, or other insured disaster.

This coverage helps pay for reasonable and necessary expenses incurred while your home is being repaired or rebuilt, including:

  • Temporary housing or hotel stays
  • Meals (if your temporary housing does not include a kitchen)
  • Laundry services
  • Additional transportation costs
  • Pet boarding, if applicable

ALE coverage is designed to maintain your standard of living during the repair or rebuilding period. It does not cover ongoing expenses you would normally incur, such as mortgage payments or utility bills unrelated to the damage. Coverage limits and duration may vary by policy, often expressed as a percentage of your dwelling coverage or a set time limit (e.g., 12 to 24 months). It's important to review these details with your insurance professional to ensure your needs are adequately met in the event of a loss. 

Each policy may vary based on the provider and the specific coverage options selected. It's important to review your policy carefully and consult with a licensed insurance professional to ensure your home and assets are adequately protected.